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Effect of Speed of Adjustments on Capital Structure Decision: A Conceptual Analysis

Author

Listed:
  • Emmanuel Kukah Damina

    (Department of Business Administration, Faculty of Management, Nile University of Nigeria, Nigeria.)

  • Taiwo Muritala

    (Department of Business Administration, Faculty of Management, Nile University of Nigeria, Nigeria.)

  • Abbas Umar Ibrahim

    (Department of Business Administration, Faculty of Management, Nile University of Nigeria, Nigeria.)

Abstract

This study conceptually examines the effect of speed of adjustments on capital structure decisions. The study provides a conceptual and theoretical underpinning focused on the review of several studies on the effect of speed of adjustments on capital structure decisions. The study discovered firm size, assets, growth, profitability, and other factors that influence the speed of adjustments. The findings from a prior study showed that estimators of the speed of adjustments include the regression analysis, generalized methods of moments (GMM) and stochastic frontier analysis (SFA) models without a predictive model. The study recommends for a generalized predictive model that determines the speed of adjustments to the optimum capital structure of firms.

Suggested Citation

  • Emmanuel Kukah Damina & Taiwo Muritala & Abbas Umar Ibrahim, 2022. "Effect of Speed of Adjustments on Capital Structure Decision: A Conceptual Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 12(6), pages 15-21, November.
    • Handle: RePEc:eco:journ1:2022-06-2
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Speed of Adjustment; Capital Structure Decision; Generalized Predictive Model;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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